Global Payments steps back from big M&A under new CEO

What's happening: Shares of Global Payments were down nearly 9% last week, after the company pointed to its new plans and provided lower than expected revenue guidance for 2025.

Flashback: Since the spinout from National Data Corp., Global Payments has regularly inked large deals.

• In 2023, it closed its acquisition of EVO Payments, whose investors included Madison Dearborn Partners, with the aim of expanding in new geographies and growing its B2B software suite. The deal was valued at $4 billion.
• In 2021, it acquired property-management company Zego from Vista Equity Partners for about $925 million. Eight Roads- and Great Hill Partners-backed MineralTree was acquired that same year for about $500 million.
• In 2019, it merged with publicly traded Total System Services in a deal then valued around $21.5 billion.
• In 2018, It acquired Sicom, a software provider to restaurants, for about $415 million from LLR Partners. That same year, it bought AdvancedMD from Marlin Equity Partners for $700 million.
• It also acquired Active Network from Vista in 2017 for about $1.2 billion.

Between the lines: "I think as we grew fairly aggressively over that long period of time, I think we lost some of our focus," CEO Cameron Bready told Axios last week following the company's investor day. "The whole operating model of the company was oriented around 'We want to grow aggressively through M&A.'"

• Bready became CEO of the company in June 2023 and began what he calls a "holistic review" of the business this year. Since then, the company has been emphasizing its focus on integrating its existing buys and cutting out overlapping functions from its siloed operations.
• "It sets us up for, in my view, the next decade of growth, which is largely going to be organic in nature," he says.
• That rules out bigger M&A deals, though the company may still pursue what Bready describes as tuck-in acquisitions.
• So far under his watch, the company acquired Takepayments for a reported $250 million and point-of-sale tech company Yazara, which previously raised $2.5 million.

The big picture: Bready says the company is exploring a "handful" of divestitures.

• It's looking at selling businesses it previously bought as well as home-grown lines.
• "They are markets that we are operating in today that are sub-scale, where I don't see a realistic path in the near term for us to be a scaled player," he said, noting that's largely referring to geographies, though that's also the case in some industry-focused areas.
• Among the names up for sale is reportedly AdvancedMD, which focuses on software and payments for physicians, per Fortune. A spokesperson for the company declined to comment on the report.

The big picture: This comes as multiple companies have been divesting of assets after a M&A payments bonanza that started in 2019.

• FIS sold a majority stake in Worldpay to GTCR last year, valuing the merchant services company up to $18.5 billion, after it bought the business for about $43 billion in 2019.

The intrigue: Some have suggested a similar shakeup at Global Payments might be good medicine, with Mizuho's Dan Dolev saying he believes the company should undo its Total System (TSYS) tie-up.

• At the company's investor day, Bready said the review conducted earlier this year only "reinforced the strategic value" of the TSYS business. Though "we will continue to explore and evaluate options for the Issuer business that may serve to achieve our strategic objectives," he said.